Grainger (NYSE: GWW), Chicago, IL, reported sales for the third quarter of $2.5 billion, a 1.1 percent decrease over the same period a year ago. Profit decreased 17.4 percent to $192.2 million.
The slight sales decrease was driven by a 3 percentage point reduction from foreign exchange and a 2 percentage point benefit from acquisitions. Excluding foreign exchange and acquisitions, organic sales were flat and consisted of 1 percentage point from volume and a 1 percentage point decline in price.
"Our results reflect the challenging industrial economy in North America," said President and CEO Jim Ryan. "While we remain confident about our ability to gain market share, we are expecting continued revenue deceleration given recent feedback from our customers and suppliers. A number of large customers have announced layoffs, and there are indications of extended year-end holiday shutdowns. We have begun the process of aggressively adjusting our cost structure to reflect the weaker economic environment."
Sales for the U.S. segment were flat in the 2015 third quarter versus the prior year and included 1 percentage point from increased sales to Zoro, the single channel online business in the United States, offset by a 1 percentage point decline in price. Sales growth to customers in the commercial, light manufacturing, retail and government customer end markets were offset by lower sales to heavy manufacturing, contractor, reseller and natural resources customers.
Canada sales in the third quarter declined 23 percent in U.S. dollars in the third quarter and declined 8 percent in local currency. The 8 percent sales decrease consisted of a 17 percentage point decline in volume partially offset by a 5 percentage point benefit from price and a 4 percentage point contribution from WFS Enterprises Inc., which was acquired Sept. 2, 2014. Lower sales to the oil and gas, construction, commercial, transportation, retail, heavy manufacturing, government and light manufacturing sectors were partially offset by growth to customers in the mining, utilities and forestry end markets. The business in Canada continues to be affected by weak oil and gas prices and lower commodity prices.
Sales for other businesses increased 18 percent in the third quarter versus the prior year. This performance consisted of 22 percentage points of growth from volume and price, partially offset by a 16 percentage points decline from unfavorable foreign exchange, and the Cromwell acquisition, which contributed 12 percentage points of growth. The organic sales increase was primarily driven by the single channel online businesses MonotaRO in Japan and Zoro in the United States.
For the first nine months, sales were $7.5 billion, up 0.6 percent from the same period a year ago. Profit decreased 4.5 percent to $623.8 million.
